Wednesday, March 31, 2010

"During his tour of Sanya Naval Base in 2008, President Hu gave instructions for naval officers to follow his neo-Confucian concept of "taking people as the foremost" by paying attention to basic-level unit strength and well-being."

I blogged about the Sanya naval base on March 23, (here) and today New York Time also has a similar write up.

New York Times Photo of this fine example of a "socialist worker's paradise" (here)

SANYA, China — One developer is building what he calls Asia’s largest hotel, with space for a casino and a greyhound racetrack.

The Visun Royal Yacht Club, China’s largest, plans to buy a helicopter for the use of its members. A golf course that charges $180 per round is opening 220 villas, each with its own butler, swimming pool and spa — “I want to get it into the Guinness Book of World Records for the most spas anywhere,” the manager says.

Then there are the property speculators flying to this resort town from across China with bagfuls of cash, to buy apartments whose cost per square foot rivals parts of Manhattan. Five-star hotels during the recent Lunar New Year holiday charged $1,500 or more per night; one company charged $80 just to camp out in a tent.

In the last two months, Hainan, an island the size of Belgium in the South China Sea, has become a potent symbol of China’s economic vitality — or, perhaps, its excesses. Even in a country where new wealth spawns new tales of luxury living every day, Hainan is viewed with a mix of awe, envy and disgust.

The boom here, unfolding as much of the world grapples with a recession, is fueled by a first-of-its-kind edict from the nation’s top leaders: On Dec. 31, the State Council, the Chinese cabinet, issued a memorandum that said Hainan had been designated a “test case” in developing an “internationally competitive tourist destination.”

Investors are interpreting that as a no-holds-barred effort to remake Hainan into the Chinese equivalent of Monaco, Las Vegas and Hawaii. While there is no clear indication that the authorities will permit the introduction of licensed casino gambling, some are betting that Hainan could overtake Macao, the former Portguese colony that is now under Chinese sovereignty, as China’s preferred island of iniquity.

“It’s as if they’ve injected a growth hormone into the economic development here, and people are wondering how it will all turn out,” said Xie Xiangxiang, the head of the Sanya Tourism Association.

The Hainan gold rush is the buzz across China. One American businessman in Beijing, Christopher Reynolds, said a group of Chinese artists told him to invest in Hainan real estate. Chinese couples on dates in Beijing restaurants chatter about it. In February, the average sales price of property in Sanya and Haikou, Hainan’s two main cities, showed a 50 percent increase over the same month last year, five times the national rate, according to the National Bureau of Statistics.

“People are coming with entire bags full of cash,” said Raymond Hau, general manager of the Sun Valley Golf Resort, which is building the 220 luxury villas. “I’ve seen this myself. A man had a bag and unzipped it. Boom. ‘Here’s the deposit,’ he said. ‘I want two apartments.’”

Mr. Hau shook his head. “It’s crazy. It can only happen in China.”

The golf resort is popular with the privileged. The president of Kazakhstan shot a hole in one here. And on a recent afternoon, when an attendant opened the passenger door of a black sport-utility vehicle that had just pulled up, a pile of large-denomination Chinese bills fluttered to the ground.

Billboards across Hainan advertise property for sale in developments with names like Miami and East Bahamas. The face of Zhang Ziyi, one of China’s most popular actresses, is plastered on some of the advertisements. The most prominent development is a series of four luxury apartment towers and a “seven star” hotel on Phoenix Island, a spit of sand off the coast that was created by the provincial government as a cruise ship dock.

The apartments — sweeping sea views, bathtubs on balconies and sofas wrapped in velvet — are being pre-sold for an average of $885 per square foot, comparable to New York prices, said Wu Lei, a spokeswoman for the real estate company.

The hype over Hainan has inspired criticism from many quarters. In an interview, Han Han, China’s most popular blogger, expressed contempt for the investment pouring into the island. Last month, People’s Daily and China Youth Daily, both official newspapers, ran editorials lamenting the rising housing and hotel prices. The editors appeared concerned that the stratospheric prices could highlight, for many Chinese, the growing class divide in this country.

“How can we create a stable and harmonious living environment if the island’s ordinary residents do not have the ability to buy housing?” wrote the editors of People’s Daily.

Even officials in Hainan seem worried. In mid-January, the provincial government announced a temporary halt to new commercial development projects. Gambling is another uncertainty. Some officials have said only modest forms of betting will be allowed, while others say Hainan could push the limits.

At the moment, gambling is banned across China, except in Macao.

The history of Hainan in the 1990s offers a cautionary tale. Early that decade, after the Chinese government had designated Hainan one of the country’s “special economic zones,” property speculators flocked to the island. Some of China’s most successful real estate magnates, including Pan Shiyi of Soho China and Feng Lun of the Vantone Group, made their first fortunes on Hainan. Across China, the island’s freewheeling capitalism became synonymous with corruption. The bubble burst after a few years, and the island stagnated.

Now, in Sanya, even those benefiting from the current boom say property and hotel prices have reached absurd levels. “There’s no real economy,” said Lin Mingkun, the manager of the yacht club and a condo owner. “It’s a bubble economy.”

Some residents say they are being priced out of housing options. On the west side of the yacht marina, there is a neighborhood where more than 1,000 fishermen and family members live in cramped alleyways.

The families have lived here for generations, but local officials and the real estate company that owns the yacht club, Hongzhou Group, are trying to persuade them to move off the land. Four women sitting outside one home said the Hongzhou Group was offering less than $20 a square foot as compensation.

“If we get kicked out, there won’t be a house for the next generation,” said one, Ms. Shi, 48, who agreed to speak on the condition that only her last name be printed.

Mr. Lin said the Hongzhou Group was building an apartment complex across the harbor for the families and would pay them more than $40 per square foot for their property. The fishing boats would be moved into another bay, he said.

The Hongzhou company, with its gleaming Times Coast condominium development by the marina, is in the vanguard of Hainan’s transformation. The yacht club already boasts more than 80 members who have each paid $92,000 for the privilege of parking their boats here for 23 years.

“In China, Sanya will be the leader in luxury leisure,” Wang Dafu, the owner of Hongzhou, said one afternoon while cruising the bay in his 72-foot Pershing yacht.

He puffed on a Cohiba cigar. “The reason you earn money,” he said, “is to spend it.”

The Chinese Navy is the special beneficiary of its government's embrace of 'externalization.'

During the past two decades, China has made substantial progress in modernizing the People's Liberation Army Navy (PLAN). Such progress is reflected in the improvements of the PLAN's submarines and surface combatants, mainly in terms of their sensors, stealth, integrated air and missile defense, and operational and strike-range effectiveness. Since late 2008, the PLAN also has been conducting its first sustained naval operations in seas far away from China's shores, as demonstrated in deployment of its counter-piracy task groups to the Gulf of Aden. Moreover, China has considered construction of aircraft carriers, and openly debated the establishment of overseas bases for maintaining a naval presence in the "far oceans."

What can account for these developments? Naturally one can think of several good objective reasons. China's defense budget has enjoyed double-digit growth since the early 1990s, making it possible to finance technology and capital-intensive naval platforms. The country has also improved its shipbuilding and naval technologies through government investments and foreign imports. Finally, the dependence of China's rapidly growing economy on external sources of energy and raw materials as well as market access has increased, making it necessary to expand naval capabilities to secure the indispensable but vulnerable sea lines of communication.

These objective factors, however, cannot become effective without the crucial influence of a key subjective factor, or the conscientious choices of China's political-military leadership to promote naval modernization. The civilian/military leadership dynamics are key: The policy of central party leadership to enhance institutional control of the armed forces particularly benefits naval modernization, as do shifting strategic priorities; meanwhile, the relatively smooth interactions between civilian and PLAN leaders (in a bureaucratic environment where civil-military interagency coordination is often quite difficult) have further elevated the importance of the PLAN.Civil-Military Relations

Because the People's Liberation Army (PLA) is a party army, it is commonly assumed that its primary function is domestic politics-to protect party leaders against intra-party political opposition, and to defend the Chinese Communist Party (CCP) against threats from Chinese society. Mao Zedong used the PLA frequently in internecine struggles before and during the Cultural Revolution of 1966-76, causing severe factional division both within the CCP and the PLA. Post-Mao leader Deng Xiaoping also employed the PLA against political threats from Chinese society, such as the popular rebellion in Beijing's Tiananmen in the summer of 1989.

Mao and Deng could employ the PLA successfully against domestic political threats because of their tremendous revolutionary/military credentials and prestige as founders of the People's Republic of China and the PLA, their personal charisma, and the personal networks they had developed that dominated China's top political-military tiers, such as the Central Military Commission (CMC).

In contrast, for more than two decades, the new generations of Chinese leaders such as Jiang Zemin (CCP general secretary from 1989 to 2002 and CMC chair from 1989 to 2004) and Hu Jintao (CCP general secretary since 2002 and CMC chair since 2004) have generally not employed the PLA against domestic political threats. Instead, they have attempted to develop institutional control of the PLA by confining it to narrow functional and technical tasks. Jiang endorsed the transformation of the PLA from a manpower-intensive force to a technology-based military. Pushing a revolution in military affairs (RMA)-based makeover for the army, he shifted the modernization emphasis from mechanization (adding new hardware platforms) to informatization (developing information technologies-based networks and software), in hopes of narrowing the technological gap with more advanced militaries. (The CMC subsequently endorsed uniting both emphases, mechanization and informatization, into a dual-construction framework.) These policies led to decisions to downsize the PLA by 500,000 billets in 1997 and another 200,000 in 2002.External Missions

Since succeeding Jiang in 2004, Hu has continued to promote RMA-based transformation to enhance institutional control of the PLA. But more importantly, among the "new historical missions" that Hu assigned to the PLA, he has particularly highlighted the PLA's new role in safeguarding China's emerging interests in outer, maritime, and electromagnetic space, and to participate in United Nations peacekeeping operations and international humanitarian assistance. What is remarkable is that these new missions are externally oriented. "Externalization" of the PLA is clearly a good political strategy for Hu in controlling the PLA, because a military focus on external threats may make it easier to manage civil-military relations.1

There are important reasons why Jiang and Hu, rather than using the military for domestic politics, have shifted to institutional control and externalization of the PLA.

The CCP's dependence on a martial crackdown for survival in 1989 bespoke a failure of governance, an inability to resolve major crises. Concerned about damage to the army's image, some in the PLA were reluctant to get involved in the suppression of the 1989 rebellion. Even for Deng, the task of persuading the PLA to intervene had not been easy. Having never served in the PLA, Jiang and Hu cannot rely on the revolutionary/military prestige and in-service personal networks that were so valuable to Deng. (With their technocratic backgrounds, they also happen to lack Deng's charisma.)

Examples from other autocracies, meanwhile, offer stark pictures of how the civil-military relationship can crumble: The popular revolts that ended communist rule in the former Soviet Union and Eastern Europe during 1989-91 showed that, rather than buttressing the party, the military mostly defied its orders.

Faced with such sobering historical precedents, Jiang and Hu are not confident that the military would take their side if ordered to intervene in another crisis on the scale of Tiananmen. Their approach to controlling both the masses and the military therefore differs from that of their predecessors. On the civilian front, they attempt to enhance the CCP's governing legitimacy by concentrating on achieving rapid and sustainable economic growth to improve living standards; such growth enhances the party's reputation for competence and helps prevent the sort of civic unrest that might require the army's intervention. On the military side, Jiang and Hu attempt to control the PLA by confining it to the aforementioned functional and technical tasks, and by requiring it to fulfill external missions.

The PLAN is clearly the biggest beneficiary of this shift toward institutional control and externalization, partly because it is one of the most technology-intensive military services, and partly because of the specific environment in which it operates and the functions it fulfills. Because the PLAN is more technology- and capital-intensive, and therefore requires lengthy and uninterrupted training to translate technologies into combat effectiveness, institutional autonomy without major political interference clearly benefits the PLAN more than the ground force. It is certainly true that institutional control also benefits the PLA Air Force (PLAAF) and the Second Artillery (China's strategic missile force), because both are also technology-based. Externalization, however, should benefit the PLAN more than the PLAAF and the Second Artillery, for two major reasons.

One has to do with the operational environment. The realm in which the PLAAF and the Second Artillery operate is mostly non-physical and one- or two-dimensional. The second reason is a result of the first: The functions that the PLAAF and the Second Artillery fulfill are fewer, mainly in terms of providing operational support and strategic deterrence. But the PLAN's operational environment is mostly physical and multi-dimensional, involving sea surface, the ocean depths, the air, space, the littoral, and the shore. So the functions that the PLAN fulfills are more numerous, which explains why the PLAN is a comprehensive service possessing its own surface combatant, submarine, air, sea-based strategic deterrence, amphibious assault, and coastal defense arms. But whereas the physical environment of the PLA ground force is largely internal, that of the PLAN is often the high seas and therefore necessarily more international.

Because of its comprehensive and international nature, the PLAN is also a versatile service that can be employed for multiple tasks in distant waters. Missions can range from the traditional-strategic and local deterrence, sea-control and denial operations, surveillance, counter-surveillance-to the non-traditional-sea-lane security and counter-piracy operations, naval diplomacy, and international humanitarian assistance. The PLAN, then, is also a strategic service. On the whole, it is clearly more useful in fulfilling the "new historical missions" (that is, missions that aim to externalize the PLA) assigned by Hu.Shifting Strategic Priorities and Naval Growth

The PLAN has tangibly benefited from the rules of both Jiang and Hu; both have strengthened the naval force, though for different reasons.

For Jiang the top strategic priority, particularly after the 1996 Taiwan Strait crisis, was to deter Taiwan from declaring formal independence and the United States from intervening militarily in a conflict over Taiwan. As a result, he strengthened the PLAN by acquiring Sovremenny destroyers and Kilo submarines from Russia, as well as indigenously developed surface and underwater combatants. He paid particular attention to the East Sea Fleet, deploying to it the Russian-built antiship platforms. Because air superiority in a military conflict over Taiwan can be gained by land-based combat aircraft, Jiang did not endorse the aircraft carrier program for which Admiral Liu Huaqing had lobbied to provide air cover for naval operations over the more distant Spratlys, in the South China Sea.2 Instead, Jiang pursued diplomacy with countries in the Association of Southeast Asian Nations (ASEAN); China joined with them in signing the Treaty of Amity and Cooperation and, regarding the South China Sea, the Declaration of Code of Conduct.

By the time Hu took over, the naval capabilities thought necessary to deter a formal declaration of independence by Taiwan (and to discourage U.S. military intervention in its support) were largely in place. The election of the anti-independence candidate Ma Ying-jeou as Taiwan's new president in March 2008 has made it all the easier for the PLA to satisfy Jiang's strategic priority of keeping Taiwan in check. Hu, meanwhile, has other "new historical missions" in mind. He has been particularly concerned about energy security. As early as the November 2003 Central Economic Work Conference, when he was the new CCP general secretary, Hu stressed the need to develop a master plan from a "strategic overall height" to achieve national energy security. Because the South China Sea potentially has rich deposits of fossil fuels and natural gas, and because it straddles major sea-lanes through the Strait of Malacca into the Indian Ocean, Hu seems to favor particularly the development of the PLAN's South Sea Fleet.

The first PLA unit that Hu inspected as CCP general secretary was a South Sea Fleet destroyer flotilla in April 2003. In April 2008 he inspected the fleet again, visiting the naval base in Sanya at Hainan Island, where he instructed: "The navy is a strategic, comprehensive, and international service. It holds an important position and plays an important role in safeguarding . . . national maritime interests." He especially requested that the navy strive to develop powerful capabilities for accomplishing his "new historical missions."3

Hu has repeatedly paid special attention to the PLAN. In December 2006 he attended the inauguration ceremony for a new type of nuclear-powered submarine and conferred a PLA flag on the captain of the boat. Hu also attended the naval parade in Qingdao to commemorate the 60th anniversary of the PLAN on 22 April 2009.

During Jiang's and Hu's years at the helm, the navy has enjoyed increased representation in the central institutions controlling China's political-military infrastructure. In September 2004 the PLAN commander gained membership in the powerful CMC, together with the PLAAF and the Second Artillery commanders. This membership has enhanced the PLAN's bargaining position in negotiating budgetary allocations, force restructuring, senior personnel appointments, and weapon acquisition.

The navy's presence in the Communist Party Central Committee has grown during Hu's tenure. And many senior positions within the PLA's ruling hierarchy have opened up to the PLAN in recent years. Naval officers now hold the positions of deputy chief of the PLA General Staff Department (GSD), deputy director of the PLA General Political Department (GPD), political commissar of the National Defense Science and Technology University, and vice president of the Academy of Military Science (AMS).Leveraging Leadership

While Jiang and Hu have actively promoted the PLAN, the service has also leveraged this support artfully to advance its own institutional interests. Only one month after Hu became CMC chair in September 2004, researchers from the Navy Military Studies Institute in Beijing published several articles in the October issue of the prestigious Military Art Journal of the AMS, arguing for shifting PLAN strategy from "near-sea active defense" to "far-seas operations." Their argument was based on the need to secure emerging Chinese interests with respect to increased dependence on maritime resources, energy imports, external trade and investment, merchant fleets, and sea-lanes, as well as on the need to improve China's unfavorable maritime strategic posture by breaking out of the confines of the "near seas" in order to gain initiative.4 The naval aspirations of both Jiang and Hu are clearly visible in these institutional efforts by the PLAN.

During his tour of Sanya Naval Base in 2008, Hu gave instructions for naval officers to follow his neo-Confucian concept of "taking people as the foremost" by paying attention to basic-level unit strength and well-being. The PLAN responded by launching a "Project of Warming Hearts and Benefiting Soldiers," meant to improve the quality of life for PLAN sailors and officers. The initiative involves construction of on-shore living quarters, libraries, sports facilities, psychological counseling centers, and battlefield-acclimatization facilities at all naval bases, with an emphasis on humanistic concerns, ecology, and personal privacy. Moving sailors from ships to land has helped boost their morale and improve their health, because quarters on board are smaller, hotter, more humid, more crowded, noisier, and more subject to electromagnetic radiation. The project also saves energy costs and lengthens the service lives of ships, because generating energy on board is expensive and takes a high toll on power plants.5

Among all Chinese military branches, the PLAN appears to be most responsive to Hu's call (in the wake of the 2008 Sichuan Earthquake) for the PLA to cope with multiple threats and fulfill diversified missions, partly because the PLAN is more versatile and therefore more appropriate for these functions. The PLAN is particularly amenable to complex interagency cooperation and coordination as demonstrated in the recent counter-piracy operations in the Gulf of Aden.

The State Council Ministry of Transportation (MT) first raised the issue of deploying naval ships to escort Chinese merchant ships against pirates in the Gulf of Aden at a meeting of the MT and the Ministry of Foreign Affairs (MFA) in October 2008. The piracy issue had become so disruptive that Chinese shipping firms might have had to breach contracts and so lose market share of global shipping; furthermore, 400,000 Chinese merchant mariners needed to be protected. China had found diplomatic efforts to resolve the piracy situation through foreign governments and international organizations to be difficult and ineffective. The MT, the MFA, and the PLAN quickly reached consensus on the urgency of the issue after intensive interagency coordination and research on three key issues of capacity, logistics supply, and international law.6 By 26 December 2008, a naval task group had set sail for the Gulf of Aden.

The PLAN's effective coordination with Chinese State Council ministries in counter-piracy operations was a sharp contrast to the PLA's behavior in the Sichuan earthquake relief efforts of May 2008, where some senior officers were reluctant to follow orders of State Council Premier Wen Jiabao, complaining that these orders risked the lives of soldiers. It is also important to note that the first two task groups for the Gulf of Aden deployment in the first six months all came from the South Sea Fleet-the fleet that Hu inspected in 2003 and 2008.The Future PLAN

For the immediate future, the PLAN is likely to continue to benefit from the institutional control and externalization of the PLA that current and coming generations of China's civilian leaders are likely to promote. The navy is also likely to benefit from the cordial interactions among civilian and PLAN leaders, based on sufficient institutional autonomy permitted by the civilian leadership and appropriate PLAN deference. The elevated importance of the PLAN can also be attributed to defense-spending increases and naval-technologies development, both of which are likely to continue concomitant with rapid economic growth and the growing dependence of China's economy on external energy sources.

Besides carrier battle groups, there are other specific indicators to look for to determine the increase in relative importance of the PLAN. It is quite conceivable, for instance, that the PLA ground force and bureaucracy are to be downsized to the extent that one army headquarters is established to replace the seven current military regions, to integrate command and control of all the ground forces. It is also possible for the PLAN to contribute a senior officer to hold the position of chief of the General Staff Department or the General Political Department, the two most important PLA staff departments that advise CMC on operational and personnel decisions. But more important, non-ground-force services such as the PLAN or PLAAF may contribute a senior officer to become one of the only two uniformed CMC vice chairs. An unintended consequence of these changes, however, is a possible increase in inter-service jealousy and, as a natural byproduct, inter-service rivalries.

6. "交通部国际合作司长透露海军护航决策由来" ("Head of International Cooperation Department of Ministry of Transportation Reveals Origins of Decision on Naval Escort"), 三联生活周刊 (Sanlian Life Weekly), 16 January 2009.

Dr. Li is an associate professor in the Strategic Research Department at the U.S. Naval War College and a member of its China Maritime Studies Institute. His most recent publication is Civil-Military Relations in the Post-Deng Era: Implications for Crisis Management and Naval Modernization (U.S. Naval War College Press, 2010).

Monday, March 29, 2010

Gunboat 611, a PLAN participant of the "August 6th" naval battle, found in a junkyard near Shanghi.

The Battle of Augest 6, 1965, occurred off the coast near the city of Shantou in eastern Guangdong Province where two ROCN submarine chasers, the 890 ton Jianmen and the 280 ton Zhangjiang were sunk by 9 boats of the PLA attack squadron.*

ISLAMABAD: Pakistan Navy is in discussions with China and France to acquire seven latest conventional submarines, negotiations with Germany to purchase three U-214 is also on cards.Chinese version offers economical price of around $230 million for each boat.

To negotiate with French DCN Company for Marline Submarines, a high level naval delegation will visit France on April 27.

Reliable sources from Pakistan Navy told DawnNews that after three years of continuous negotiations with Germany PN has decided to avail some other options as well for acquiring next-generation submarines.

Sources maintained that Islamabad is deeply interested in acquiring four Chinese Yuan and Song Class and three French Marlin class latest diesel electric conventional versions in a bid to meet any challenge from the rapidly expanding Indian navy.

Initially German company HDW had drawn up technical specifications for three U-214 boats and a billion dollars contract also intact and was almost final.—DawnNews

The southwest of China is gripped by the worst drought in a century and this week the country sent soldier armed with demijohns of water to help affected areas.

State media reported on Friday that 1,000 soldiers, each equipped with a 25-litre plastic water container, had been mobilised to help with drought relief and a further 3,000 would be sent over the next few days.

The soldiers are being sent to the Yunnan province and as well as the water containers will carry well drilling equipment and sanitation devices.

"The soldiers are prepared for long-term work in the field," Li Shiming, commander of the Chengdu military division.

No substantial rainfall was expected ahead of the rainy season in May.

The drought had left 18 million residents and 11.7 million livestock in the region with drinking water shortages, as well as wrecking crops.

Before the arrival of the new troops, other troops and local paramilitary forces have been engaged in the relief work.

They have regularly shipped water to villages and helped villagers find new sources of water. The army has also sent technicians to teach farmers how to save water for farming.

Friday, March 26, 2010

On March 26 2010, Russia's arms-tass.su announced that the delivery of 15 battalion of S-300 MPU2 to China has been completed (here). At the same time, the Chinese HQ-9 is going head-to-head with the Russian S-300 on Turkey's SAM bid.

The Russian S300s are seen as very effective, but they are not compatible with NATO systems. Hürriyet photo

U.S. and Western European companies are the usual winners of major Turkish defense contracts, but now for the first time, two non-NATO members seem to have a good chance to grab a strategic defense deal with Ankara.

For Turkey's multibillion-dollar plan for a long-range antimissile air defense program, U.S., European, Russian and Chinese rivals have submitted their best and final offers to Turkey's procurement agency before a March 1 deadline.

Competing are the U.S. companies Lockheed Martin and Raytheon, with their Patriot Advanced Capability-3 (PAC-3) systems, Russia's Rosoboronexport, marketing the S300, the China Precision Machinery Export-Import Corp., offering its HQ-9, and the Italian-French Eurosam, maker of the Aster 30.

Turkey is expected to select a winner late this year or in early 2011.

Turkish procurement officials said they are taking the Russian and Chinese options seriously.

Pros of rival systems

On the U.S. side, the latest major development came in September when the Pentagon's Defense Security and Cooperation Agency notified Congress of a planned foreign military sale to Turkey of 13 PAC-3 fire units, hundreds of Patriot-based missiles and related gear. Congress' permission for the potential sale came in late September.

Eurosam mainly relies on Italy's good defense industry relations with Turkey, analysts agree. In the past couple of years, Italian companies signed two major contracts with Ankara for attack helicopters and a military satellite and are competing with U.S. rivals for joint production with Turkish firms of hundreds of utility helicopters worth billions of dollars.

Eurosam's participation in the Turkish competition became possible only after the Turkish procurement office, the Undersecretariat for Defense Industries, or SSM, removed MBDA of France, one of Eurosam's top shareholders, from a blacklist in January.

Last year MBDA was not allowed to bid for Turkish weapon contracts because of a legal dispute over the cancellation of an earlier contract for anti-tank missiles.

But the issue was resolved amicably after MBDA paid more than 100 million euros to SSM in line with a verdict last summer in an international arbitration court.

The Russians earlier were hesitant about whether to bid but decided to go ahead and formally submit their offer when Prime Minister Recep Tayyip Erdoğan visited Moscow and held talks with Russian Prime Minister Vladimir Putin in mid-January, one business official familiar with the issue said. The Russian S300s are seen as an effective system.

The Chinese, meanwhile, are expected to offer the cheapest price and the highest degree of technology transfer, defense analysts said.

Compatibility a problem

But the biggest problem with the Russian and Chinese options is that their products are not compatible with NATO systems.

The first phase of the program for four fire units is expected to cost between $1 billion and $2 billion. But the cost will rise with the planned purchase of more fire units in the program's follow-up phases.

Turkey is planning to deploy the systems for the defense of the capital Ankara and major defense installations in other parts of the country.

Absent in the present Turkish competition is Israel's Arrow 2 antimissile air defense systems, co-manufactured with the United States. Turkey's political ties with Israel have deteriorated over the past year because of Israel’s military operations against Palestinians in Gaza and Ankara's repeated condemnation of them.

PLA Daily and CCTV report a PLAAF S-300PMU2 Brigade from the Jinan Airforce on a maneuver near Lanzhou. (here)

Chinese Defense Minister Liang Guanglie pledged military cooperation with Afghanistan and Nepal on Thursday when meeting his counterparts from the two countries.

In meeting with Afghan Defense Minister Abdul Rahim Wardak, Liang said China and Afghanistan had developed smooth relations since establishing diplomatic ties in 1955 and China appreciated the staunch support given by Afghanistan on issues relating to China's core interests.

"Chinese military will continue assistance to the Afghan National Army(ANA) to improve their capacity of safeguarding national sovereignty, territorial integrity and domestic stability," said Liang.

The ANA's troop numbers had surpassed 100,000 and Afghanistan was dedicated to building its capacity to improve the security situation, said the Afghan Defense Ministry, with the goal of having a 134,000-strong army by the end of 2011.

Wardak said he hoped the ANA would be "strong enough to defend the country against internal and external threats" after NATO-led forces, particularly after the U.S., withdraws from the country.

Military-to-military cooperation between China and Afghanistan had developed smoothly in military supply and personnel training, said Liang, noting that all the aid offers were provided on an unconditional basis.

Wardak thanked China for its assistance and suggested both sides should cooperate more in the fight against terrorism, drug trafficking and organized crime.

In meeting with Nepalese Defense Minister Bidya Devi Bhandari, Liang said China attached great importance to bilateral military relations and was willing to boost personnel exchanges and cooperation to contribute to the security and stability of the two countries and the region at large.

Bhandari said her country was grateful for the training services China provided to the Nepalese military, hoping more help would come from China in the fields of information, hygiene and peacekeeping.

Bhandari reaffirmed that Nepal upheld the one-China policy and recognized Tibet as an inalienable part of Chinese territory.

ABU DHABI // Two Chinese warships docked in Port Zayed yesterday, the first time a naval contingent from the country has berthed in the Middle East.

The FFG-525 Ma’anshan, a 135-metre frigate, and the supply vessel Qiandaohu arrived from a six-month mission in the Gulf of Aden and the Red Sea where they were part of the international force protecting commercial ships and oil tankers from Somali pirates.

“We came for peace and friendship, for mutual understanding and for expanding mutual exchange,” said Senior Captain Quu Yanpeng, the deputy chief of staff of China’s East Sea Fleet.

“Our friendly co-operation is not only in the interest of our people but also conducive to the global peace and stability. The friendly exchange between our navies is an important component of our bilateral relations.”

He was speaking during a brief ceremony at the port that was attended by Sheikh Saeed bin Hamdan Al Maktoum, the deputy chief of Naval Operations.

The visit is viewed as a reflection of China’s growing ability to protect its interest beyond its borders. Beijing has dispatched five groups of ships since early last year to protect its vessels in the Gulf of Aden, a move that was largely anticipated alongside China’s sustained economic growth and energy demands.

The visiting ships, which will leave for home on Sunday, have escorted more than 600 Chinese and foreign vessels, according to Xinhua, China’s state news agency.

“The ships have succeeded in repelling attacks against many ships. They’ve contributed to protecting Chinese and non-Chinese ships,” said the Chinese ambassador, Gao Yusheng. “The Gulf is an area that has enjoyed close ties with China. Maintaining security in the Gulf is vital to the area and the world, including China.”

Mr Gao said his country’s navy had chosen the UAE as the first country in the region to visit “because of the strength of political ties between our two countries, and the development that has been witnessed by the Emirates in recent years”.

During a visit to Beijing last summer by Sheikh Mohammed bin Zayed, the Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, the countries signed several agreements, including two on military ties and one relating to the oil industry.

“Now we’re negotiating,” said Mr Gao said. “This year, we will sign an agreement to import oil” from the UAE, he added.

According to the United States’ Energy Information Administration, China will import nearly six million barrels of oil per day from the Middle East by 2030. In 2008, the figure was 1.8m barrels, making the region the largest supplier of crude oil to China. Most is supplied by Saudi Arabia, with the rest from Kuwait and Oman.

China is also expanding in other sectors, mainly construction. In the past two years, Chinese companies have won 18 major projects in the UAE, worth Dh4.8 billion (US$1.3bn).

mhabboush@thenational.ae

One of the Chinese ships docked at Port Zayed is the FFG-525 Ma’anshan, the first missile frigate wholly made in China